Would CES Legislation Be Like Half a Loaf of Cap-And-Trade?

With everyone in agreement that cap-and-trade legislation is dead in Congress for the near term, attention is now turning to whether Congress might be able to pass some kind of renewable or clean energy standard. In fact, even Thomas Donahue, President of the U.S. Chamber of Commerce, sworn foe of cap-and-trade legislation, is saying that the Chamber could support some kind of climate change legislation – presumably a CES including nuclear power – as long as the legislation precludes EPA regulation of GHG under existing authority. 

For those who are taking the half a loaf approach to climate legislation, I recommend this post by Rob Stavins at Harvard and Dick Schmalensee at MIT, which compares cap-and-trade legislation with CES legislation. The piece is a remarkably cogent short analysis of the issue, so I hate to excerpt something which can be read in a few minutes. Nonetheless, for the lazy among my readers, the bottom line is that:

Carbon cap-and-trade has been killed in the Senate, presumably because of its costs. Renewable electricity standards or clean energy standards would accomplish considerably less and would impose much higher costs per ton of emissions reduction than cap-and-trade would. This does not sound like a step forward.

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